Accounting 1 Accounting is how your business records and analyzes as financial information for people who are interested. TRUE FALSE 2 There are 3 types of Accounting information Financial Management, and Cost. TRUE/FALSE 3 AC201 focuses on financial accounting, TRUE/FALSE Financial Accounting (information is focused on the internal financial statements of a company. TRUL/FALSE 5 An accounting system only consists of the records used by an organisation. TRUE/FALSE 6 An accounting system develop accounting information for decision makers. TRUE/FALSE 7 Accounting entries involve a minimum of one account. TRUE FALSE 8 Assets plus liabilities equals owner's equity.TRUE/FALSE 9 Liabilities often have the word receivable in their account. TRUE FALSE 10 Revenues minus expenses equals net income. TRUE/FALSE 11 Another name for the balance sheet is Statement of Financial Position TRUE FALSE 12 When the capital increase, it will be debited. TRUE FALSE 13 When the supplies increase, it will be debited. TRUE FALSE 14 When the expenses increase it will be debited. TRUE FALSE 15 When unearned revenue increase, it will be debited. TRUE FALSE 16 There are 8 steps in the accounting process. TRUE FALSE 17 Making end-of-period adjustment is the step in the accounting orde TRUE/FALSE 18 The Financial statements of a business entity a include the balance sheet, Income statement and tax return Provide information about the profitability and financial position of a company c Are the first step in the accounting process Both A and Bare correct. 19 A balance sheet is designed to show the financial position of an entity At a single point in time Over a period of time such as a year or a quarter. At December 31 of the current year At January 1 of the coming year 20 An income statement is designed to show the Financial position of an entity . At a single point in time Over a period of time such as a year or a quarter At December 31 of the current year At January 1 of the coming year 21 Account Payable and notes payable are Always less than the amount of cash a business own b Creditors Written promises to pay a certain amount, ples interest zadetinite future d abilities 22 The balance sheet of Vineca includes the following items: Cash Notes Payable Accounts Payable Equipment Accounts Receivable Notes Receivable Capitol Stock Supplies This list includes: a Six assets and two abilities Six assets and one liability Five assets and two liabilities d Five assets and three liabilities MATHAWEE FAMILY DENTISTRY Balance Sheet January 1.2020 Assets Liabilities & Owners Cash $32,000 Accounts receivable 5250 und 313.50 $74.250 Building 371.250 oviment 232.400 Total assets $825.50 Total ster's equity S825.650 During the first few days of January, the following transaction occurred Jan Borrowed 599,000 from the banking anote payable or in 30 days dan 3 Additional capital stock was issued in exchange for SASS lan 3 quipment was purchased for 562,700 on credit Sans Collected $76,400 of its accounts receivable and a $37.950 e indicate your answer to each of the following questions in the space provided 21 On lanuary 6, total sets of the business amount to *}$1,059,200 b) $99.950 dS1021350 5826.650 24 On January 6, owner's equity amount to a) 5752,400 b) 546550 05796950 5871.200 25 Ondanary, the accounts payatles 26 On January 6, the accounts receivable balance 27 On January 6, the cash balance is 23 Which of the following does not describe accounting? a languape of business is an end rather than a means to an end wetul for decision making used by extemales 23 Adjusting entries occur when there is one or more conting period TRUE/FALSE 30 Adjusting entries CAN be made on a daily basis. TRUE FALSE 31 and is an example of depreciatimes. TRUE/VALSE 2 Using Supplies is an example of depreciation. TRUE/TALSE 33 Amounts collected in advance REPRESENT TRUE/TALSE Uncanned Revenue will be paid off. TRUE/TALSE 35 Accruing Unpaid Expenses has no effect on revenue TRUE/FALSE 36 Accring Uncollected Revenue has to bet on TRUIEJAUSE 37 You will likely see neared revenue and revenue med TRUE FALSE 33 Before month and adjustments are made, the February 2nd of Bee's Enterprise contains revenue of $45,000 and expenses of $33.450. Adjustments are necessary for the following Portion of prepaid rent applicable to Feb $2.500 Depreciation for Feb 51.440 Portion of fees collected in advance and 2.500 Fees and infeb, not yet billed to customer 52.540 Net Income for Febis $22.250 b|$11550 4513.650 39 Bee Studio found that total equity was understated and breated. Which of the following errors could have been the cause Making the adjustment entry for depreciation expensee Failure to record interest scored a note pale Failure to record revenue that had been earned but not yet billed to clients. Failure to record the earned portion of fees received 40 Book value will be presented in Statement of Financial in TRUE/ALSE 41 Adjusted trial balance will be used for Financial Statements TRUE FALSE 42 Net Income Dividend Retained in TRUE FALSE Lawsuitspending against the business should be conceal TRUE FALSE 4 The amount of retained earnings will equal when doing the idea TRUE FALSE 45 Which of the following financial statements in generally prepared first? a) Income statement b) Balance Sheet c) Retained Earnings d) Statement of Cash Flows 46 Which of the following account would never be reported as expenses in income statement? a) Depreciation Expense b) Income Taxes Expense c) Interest Expense d) Dividends Expense 47 Which of the following account(s) would never appear in the after-closing trial balance? a) Unearned Revenue b) Dividends c) Accumulated Depreciation d) Income Taxes Expense 48 Can a company be profitable but not liquid? Explain 49 What requirement is imposed by the double-entry system in the recording of any business transaction? 50 What is the purpose of adjusting entries? Boonyakorn began professional practice as an IT consultant on January 1. He plans to prepare a monthly financial statement. During January, the owner completed these transactions: Jan 1. Owner invested $500,000 cash along with computer equipment that had a market value of $150,000 three years ago but is now worth only $100,000 Jan 2. paid $15,000 cash for the rent of office space for the month Jan 4. Purchased $12,000 of additional equipment on credit (due within 30 days. Jan 8. Completed a work for a client and immediately collected $32,000 Jan 20. Completed a work for a client and sent a bill for $27,000 to be paid within 30 days. Jan 12. Purchased additional equipment for $8,000 Jan 1. Paid an assistant S6,200 at wages for 15 days. Jan 18. Collected $15,000 owed by the client. Jan 2. Paid $12,000 to settle the liability on the equipment purchased. Jan 28. Owner withdrew $500 for personal use. Jan 30. Completed work for another client who paid only 540,000 for 50% of the system Jan 31. Paid salary of assistant $700. Jan 31. Received TOT bill, $1,800 and EGAT bill$3,800 Tasks: Prepare the journal entries. Taccounts and trial balance for the traction Equity Tasks Complete the table.hing L.D. and. Not the effects of eaching the Adjustment Type Revenue Expenses Net Income Assets Type Type Type III ! Type IV Listed below are nine technical terms used in this chapter Liquidity Nominal accounts Real accounts Adequate disdesure Dividends Income Surimary Closing Entries After-closing trial balance interim financial statements 1 The accounting principle intended to assist users in interpreting financial statements 2 A term used to describe a company's ability to pay its obligations as they come due 1. A term used in reference to accounts that are closed at year end 4 A term used in reference to accounts that are not closed a year end 5. A document prepared in detecting whether errors occurred in posting the closing entries. 6A policy decision by a corporation to distribute a portion of its income to stockholders 7. The process by which Retained Earnings account is updated yearend & Entries made during the act period to correct errors in the original recording of transactions Indicate whether a debit or credit is required to close each of the following accounts. Use Dif a debit is required, Cif a credit is required, and N if the account is not closed at the end of the period. Salary Expense Unexpired Insurance Consulting Fees Earned Depreciation Expense Dividends Retained Earnings Interest Revenue Accumulated Depreciation Income Taxes Expense Unearned Revenue Income Summary (profit) Income Summary (loss) Indicate whether each of the following accounts appear in debit or credit of an after-closing trial balance. Use D for debit, C for credit, and if the account does not appear. Unearned Revenue Accumulated Depreciation: Office Equipment Land Consulting Fees Earned Capital Stock Income Summary (profit) Depreciation Expense: Office Equipment Income Taxes payable Unexpired Insurance Dividends Retained Earnings Dividends Payable